By Despina Mavromati

The Issue

Before the CAS: Termination of a contract of employment between a football club and a player without just cause.

Before the Swiss Federal Tribunal: The Panel’s assessment of the evidence cannot be reviewed by the Federal Tribunal.

The Facts

The case relates to the termination of a contract of employment without just cause between an Egyptian professional football club X and the professional player A. Club X requested the annulment of a CAS award that awarded the player compensation in the amount of 650’000 USD, partially confirming a previous DRC Decision. The ground invoked for the annulment of the CAS award was the violation of the Club’s right to be heard.

The Findings of the Swiss Federal Tribunal

Violation of the parties’ right to be heard and assessment of evidence by the arbitral tribunal

In essence, the Appellant club alleged a violation of its right to be heard because the Panel refused to add an amount of USD 35’000 to the outstanding debt, even though it had produced other checks to prove that payments had been made to the local tax administration, and the Panel had not questioned these elements of evidence.

The Federal Tribunal dismissed the plea for two distinct reasons. First, questions related to the assessment of evidence cannot be reviewed and fall outside the scope of the plea of the right to be heard. Second, the principal matter related to these payments was discussed only to determine whether the Appellant was entitled to make certain deductions from the Respondent’s salary for income tax purposes. There was therefore no link between this question, which was decided in favor of the Appellant, and the taking into account of checks, copies of which the Appellant produced in order to prove the partial repayment of its debt to the Respondent (at 3.2.1).

 

The Appellant further submitted before the SFT that the Panel should have reduced the amount by taking into account the Appellant’s internal rules but failed to do so. On this point the Panel found that it was unconvinced of the probative force of the written testimonies by the Appellant to support its claim. In the Appellant’s view, the Panel had failed to take into consideration the Financial List for Football First Team, a document which had been signed by the Respondent. Again, the Federal Tribunal dismissed the argument since it relates to the assessment of the evidence by the CAS Panel, which is non-reviewable by the SFT.

 

Violation of material public policy for lack of consideration of the principle of Force Majeure

The Appellant referred to the tragic events of the Port Said Stadium riot back in 2012, which had caused more than 70 deaths and were followed by the cancellation of the championship. The events had caused a massive loss of revenue related to sponsorship as well as the sale of tickets for Egyptian football clubs. According to the Appellant, the fact that the CAS Panel did not consider these events as a force majeure constituted a violation of substantive public policy.

Without questioning the gravity of the events, the CAS Panel considered that there was no causal link between the events in Port Said and the failure of the Appellant Club to pay the Respondent’s salary. Furthermore, the Panel found that the Appellant had not raised this argument until much later, without demonstrating that these same events would have led to the non-payment of the salaries of the other players of the team. Again, these findings of the Panel could not be reviewed by the Federal Tribunal and were dismissed as inadmissible without needing to check whether the force majeure falls within the scope of material public policy under Swiss international arbitration law (at 4.2.1).

Violation of material public policy through the violation of the principle of contractual fidelity

Finally, the Appellant endeavored to attack the award from the angle of violation of contractual fidelity due to an alleged misinterpretation of a contractual clause (at 4.2.2). The Federal Tribunal reiterated that such misinterpretation falls outside the scope of the principle of contractual fidelity, which would only be violated if the Panel proceeded to the required imputation after having maintained, as it did, after interpreting the contract, that such imputation was not justified.

 

The Takeaway

In summary, there are no revolutionary findings in this judgment but only a reminder of the wide powers of the arbitral tribunal to assess the evidence in the circumstances of the case, which cannot be reviewed by the Federal Tribunal under the scope of Art. 190 (2) (d) PILA. Also, even though the principle of force majeure theoretically falls within the scope of public policy (Art. 190 (2) (e) PILA), it is required to substantiate such allegations and show the causal link between the events that constitute the force majeure and the issues at stake.

 

Note: Swiss Federal Tribunal Judgment 4A_502/2017 of June 25, 2018 (Sports Arbitration), motion to set aside a CAS award rendered on July 11, 2017 (2016/A/4520 & 4521). The full judgment is available in French at the website of the Swiss Federal Tribunal www.bger.ch. The English translations of the international arbitration decisions rendered by the Swiss Federal Tribunal (from French, German and Italian) are available on the website www.swissarbitrationdecisions.com , operated jointly by Dr. Despina Mavromati and Dr. Charles Poncet as a service to the international arbitration community.